In my years of experience as an Advisor, I have had many clients ask me about investing on their own. The general concept of investing is one of those phenomenons that everyone around you seems to be a natural pro at since most are quick to share their wins! Coming from the other side of the fence, I will share that many clients have confessed their losses to me… Let me be clear that investing is not as easy as it looks; however, it is something I highly encourage amongst my clients. Education is at the forefront of my investment management and the foundation for making investment decisions, whether done alone or with a professional.
For those who want to take on the challenge, please let me share my words of wisdom and caution. There are four areas that will be beneficial to keep in mind when investing on your own.
1. Determine Your Investment Strategy – Do-It Yourself + Research
From what I’ve seen, this process usually involves a mix of Google searches, combined with taking stock tips from a friend at the last social event you went to! Trust me when I say if you want to learn the ups and downs of trading, there is no better way to do it than doing it yourself. However, be wary of the information you use for your research; like anything, there is a lot of biased information out there that can lead you astray. I often see clients who haven’t even factored in the most impactful risk to their finances – education!
2. The Oh-so-Valuable Commodity of Time
Our most precious commodity is time, so beware that investing on one’s own takes A LOT of time, effort and energy. Even if you have time to spare, will you actually do it? Will you really put in the time required to achieve this? All too often, I see DIY turn into no-one-does-it.
3. Cost-effectiveness Can Turn Costly Quick
Usually, stock trades and ETF trades are affordable, and sometimes, monthly fees can be pretty low. However, be cautious when investing in funds as their fees are usually high, especially when positioned as a DIY. In addition, remember that finances are intertwined – pulling one lever could change the entire plan and cause some unintended consequences – costly ones.
4. Keep the Emotions Out of Investing
It can be very tempting to move money to another investment or withdraw it all together during the ups and downs of the daily market experiences. However, these bumps are all part of a “normal” market. Maintaining a long-term focus, free from any short-term disruptions, is the key to growing your wealth – that is achieved based on facts and economics, combined with staying the course, rather than opinions and emotions and rash decisions.
I hope you find this information useful, and to anyone who is currently on their solo investment journey, enjoy it, and I wish you the best of luck! To gain more access to my insights, be sure to sign up for my monthly newsletter here or follow me on Instagram or Linkedin.
